AMARILLO, Texas (KFDA) - With low energy demand last year due to the pandemic, area oil producers struggled with the historically low oil prices.
Right now, energy prices are down 20 percent from last year with oil costing around $53 per barrel.
Oil barrel prices were in the single digits back in April for a little bit, and for a day, they were a negative $38 dollars which has never happened before.
“I think you’ll see a continual, slow continual increase in the price of oil which will allow producers to start producing. And then as the country opens up again, we will see more oil and gas prices increasing and jobs,” said Judy Stark, president at Panhandle Producers and Royalty Owners Association.
“We have a really vibrant domestic and local oil and gas sector that is active and on the job of producing the energy that we ourselves demand. And so, everybody would like to pay less for gasoline rather than more, but again in the Texas Panhandle and Amarillo, relatively higher prices for energy products mean good things economically for us,” said Karr Ingham, petroleum economist for Texas Alliance of Energy Producers.
Amarillo economists say price per barrel will have to be around 55 to 60 dollars to start drilling rigs the Texas panhandle.
“You don’t have to go very far to get into very active oil and gas producing sectors of the Texas Panhandle... That’s kind of a moving target. The thing that happens when activity levels go down, particularly as sharply as they did, is that the cost of drilling and other such things goes down as well,” said Ingham.
“Where you really start seeing things doing well is when you hit $60 a barrel. And past about $65 a barrel you’ll start to see our economy grow,” said Stark.
Currently there are no drilling rigs operating in the panhandle.
“Energy demand will be a slow and steady recovery I think as we go through the year. But again, having experienced 2021 from all aspects of this. People and just their economic circumstances, employment and then the oil and gas sector having suffered the way it did, 2020. 2021 just looks like a much better year all the way around,” said Ingham.
Ingham continues to say prices are not has high as they have been, but this pricing is helping the oil and gas sectors which will play a part in boosting the Texas Panhandle economy.